It’s official: AT&T to buy DIRECTV

It’s official. The boards of DIRECTV and AT&T have announced that AT&T will acquire DIRECTV. DIRECTV’s current stockholders will get $95 per share, with about two thirds of that being a direct conversion into AT&T stock and the rest coming out as cash. A webcast will be held at 8:30am tomorrow… we’ll be here to let you know the real story as it unfolds.

What does this mean?If the deal is approved by regulators, AT&T will aggressively be expanding its broadband reach to more than 15 million customer locations within four years, and for the first three years, they’ll be respecting net neutrality, regardless of what the FCC decides this year.

DIRECTV’s existing service will continue to be available for at least three years after the deal closes on a standalone basis. After that, who knows… there may be future synergies down the line. If you’re interested in learning more about the story, here’s the press release.

Remember too that the deal is subject to regulatory approval. AT&T had tendered a deal to buy T-Mobile at one point and the FCC shot that down, and DIRECTV’s merge with DISH was also shot down by regulators. The difference is that today there’s a precedent with the merge between Comcast and Time Warner Cable. The deals are likely to be seen as a package; you can’t approve one and not the other. So, if the Comcast deal goes through, expect the DIRECTV deal to have an easier time.

So what we’re seeing here is exactly what we predicted… that once the deal closes it will still be business as usual for the two companies for a few years to come. Beyond that, we’ll see if there are any partnerships that tie the companies together. AT&T sometimes divests itself of holdings in order to increase its cash position, and it’s way too early to tell if DIRECTV is just a short-term partner or a long-term anchor to AT&T’s future growth.

About the Author

Stuart Sweet
Stuart Sweet is the editor-in-chief of The Solid Signal Blog and a "master plumber" at Signal Group, LLC. He is the author of over 8,000 articles and longform tutorials including many posted here. Reach him by clicking on "Contact the Editor" at the bottom of this page.